Editorial: Sensible move
OPINION: The Government's decision to rule out changes to Fringe Benefit Tax (FBT) that would cost every farmer thousands of dollars annually, is sensible.
These plans set out a council’s long term focus, describe the activities it intends to provide and specifies the community outcomes to be achieved. More importantly from the ratepayer’s perspective, the plans show who will foot the bill for these activities.
Federated Farmers staff and elected members are busy scrutinising these plans. Members don’t fully understand where their membership money is spent. It has taken me a while to get my head around all the different activities of the federation and its effort towards keeping 85 councils honest and fair to rural communities.
At Federated Farmers’ Hamilton office I observe mountains of folders our policy staff have to read, in a short time, to write their submissions, present them and hopefully get some big wins for our members and communities. It’s a job I prefer to leave to professionals.
Rates are a big expense for the urban population and even bigger for rural dwellers, especially now when commodity prices are low and the US dollar is high – tough for our exporters. Federated Farmers has a strong interest in the effective performance of local government and strives to ensure transparency in rate setting and a fair go in the overall cost of local government to agriculture and ratepayers.
The federation submits on at least 60 annual plans each year, so our elected members and staff well understand what’s reasonable. Councils have a tough job in meeting the growing legislative requirements of recent years, while being saddled with an archaic system of property value rates, where landowners are disproportionally charged higher on behalf of the whole community.
So, three cheers for the Waikato Regional Council, which has proposed a prudent draft LTP with only a very small overall increase in total rates – 0.8%.
The council has tried hard to be fair, and its consultation documents and extensive background documents are user friendly – important in serving ratepayers. For our policy advisors, it enables them to better engage and inform the rural community and be a conduit to ensure the council meets their needs.
I make this suggestion: the council needs to keep the increasing trajectory of the annual general charge (UAGC) for the rest of the LTP, not just the first year.
Full use of the UAGC will reduce the council’s reliance on property-value rates, which will reduce the inconsistencies between what farmers contribute to council public-good functions compared to those of other ratepayers.
To date the council’s UAGC hasn’t represented progressive good practice and lags behind many other regional councils. The affordability and fairness of rates is a big issue for farm businesses, given that in large part they are allocated on the basis of property value as opposed to income.
Further increasing the UAGC will help to relieve this burden and provide for more reasonable rating in that all households, rural or urban, will pay a fairer amount for access to the same services.
Just as the council’s service of democracy benefits all ratepayers in the same way, so they should pay the same as far as possible.
For those on lower incomes that struggle to afford it, there is help via schemes such as the rates rebate scheme.
• Chris Lewis is Federated Farmers Waikato provincial president
